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Keeping Your Account in Check

Spring is such a wonderful season! It’s time for you to buy gardening tools, plan your summer vacation, buy presents for all the weddings and graduation parties you’re going to be invited to, and buy new clothes for all those spring socials. For some busy consumers, it also may be a challenging time to keep track of all these purchases and avoid overdrawing their bank account. You can avoid the inconvenience, embarrassment and cost of overdrafts by not believing two common myths.

Myth #1

Balancing your checkbook by hand is the best way to track transactionsKeeping a ledger of my account is not necessary since I can use internet banker or check my balance at an ATM to know what funds I have to work with.

Reality –You will need to subtract any outstanding debits from the available balance displayed on internet banker or the ATM.  Outstanding debits can be checks you have written, debit card transactions, automatic debits and any other withdrawal that has not yet come out of your account.  Unless you are lucky enough to have a perfect memory, you will need to keep a record of activity. Your checkbook ledger is a good tool to help you keep track of how much money you have to pay bills, make purchases or make cash withdrawals.

Myth # 2

I can write a check for funds that are not yet in my account if I:

  • know that my direct deposit payroll will go into my account in a couple of days or
  • post-date the check and tell the payee not to cash it prior to the date I wrote on the check.

Reality – Whether you are mailing a check or paying by check at a cash register, there’s a good chance that the check will post to your account faster than you may think.  Merchants have the ability to convert a check to an automatic debit, and the amount will be deducted from your account sooner. If you mail a check, there is a good chance that the company you mail it to will use a “lockbox” service. This helps businesses collect funds more quickly, because the bank automatically retrieves, processes and deposits the funds.

Your banker can provide you with many solutions to help you manage your account. Helpful options and tools include setting up a sweep from a savings account or personal line of credit, establishing internet banker notifications if your balance falls below a certain level, and using mobile or text banking when you’re on the go.

Ultimately, you are in the best position to know what checks you’ve written and money you’ve spent at any given moment. Just be sure you’re using all the tools available so you can manage your account. What tips do you have to help other banking customers.

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Posted in Banking Basics.

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